Examples on External Sources

Question 1

Bank loan

Answer 1

Borrow a lump sum of money , must be repaid over time with interest

Question 2

Bank Loan Advantages

Answer 2

Repayments instalments , cash flow easier , dont have to issue shares

Question 3

Bank Loan DIsadvantages

Answer 3

back up loan with security e.g assets , pay back interest

Question 4

Overdraft

Answer 4

A pre-arranged allowed when it likes

Question 5

Overdraft Advantages

Answer 5

Short term funding, flexibility to review funding

Question 6

Overdraft Disadvantages

Answer 6

Interest overdrawn , be ended by bank at any time

Question 7

Grants

Answer 7

Given European , national or local government creation of bank of a business. DOES NOT have to be paid back

Question 8

Grants Advantages

Answer 8

Doesn’t have to be paid back , helps new businesses , creates jobs

Question 9

Grants Disadvanteges

Answer 9

Application , not available for all businesses

Question 10

Venture Capital

Answer 10

Called an investor , invests in start up businesses for % share profit

Question 11

Veneture Capital Advantages

Answer 11

Potential large sums money for investment

Question 12

Veneture Capital Disatdantage

Answer 12

lose a percentage of the business, a long complex process, risk of conflict perceived interfrece